Raskulinecz Outlines Congressional Bills and SEC Rulings That Seek to Widen Accredited Investor Pool; Private Equity Funding & Other Alternative Assets Allowed in Self-Directed Retirement Plans Would be Available to More Investors as a Result
ROSELAND, NJ, November 06, 2023 /24-7PressRelease/ — Jaime Raskulinecz, CEO of Next Generation Trust Company, has published an article about potential changes regarding who qualifies as an accredited investor titled “Accredited Investors: Who’s In, Who’s Not.” She is a thought leader on the Forbes Finance Council and provides information and guidance about self-directed retirement plans and related matters.
Historically, accredited investors are relatively high-net-worth individuals who must earn an annual income of at least $200,000 for the previous two years or $300,000 for married couples; and have a net worth, excluding primary residence, of at least $1 million in assets.
“Those criteria did not factor in an individual’s knowledge or understanding of investments or personal finances until certain SEC amendments passed in 2020 broadened the accredited investor definition beyond income to be based on ‘established, clear measures of financial sophistication’ as well,” said Raskulinecz.
Accredited investors and self-directed retirement plans
Accredited investors can make investments in non-registered private equity (in startups and early-stage companies), equity crowdfunding, venture capital, private placements, and hedge funds—all popular asset classes for the self-directed investors Next Generation works with. However, the income and net worth criteria overlook savvy investors who know and understand many types of alternative assets, which individuals may include in their self-directed retirement plans.
Potential expansions of accredited investor definition
As outlined in the article, there are several legislative bills that have been proposed since June 2023 as well as criteria reviews by the SEC, such as:
• The Equal Opportunity for All Investors Act, enabling more people to invest in more complex investment vehicles after passing a special securities test.
• The Accredited Investor Definition Review Act, in which the SEC would review the accredited investor criteria every five years and give regulators the authority to revise the criteria as they see fit.
• The Fair Investment Opportunities for Professional Experts Act would give certified broker-deals, investment advisors, and others with specific licenses or experience accredited investor status.
“Given that self-directed investors are expected to do their research and due diligence about any asset they wish to include in their plan, I look forward to seeing what changes will be implemented to enable more individuals to include equity funding along with the many other types of alternative assets allowed in self-directed IRAs and other plans,” said Raskulinecz.
About self-directed IRAs
Self-directed IRAs allow investors to include investments in many alternative assets—such as real estate, precious metals, private equity funding, and royalties—within their tax-advantaged plans. Account owners may self-direct Traditional and Roth IRAs, SEP and SIMPLE IRAS, education savings accounts, and health savings accounts. Self-directed solo(k) plans are another option for business owners. Self-directed retirement plans are offered by specialty custodians, as most traditional broker-dealers and financial institutions don’t allow non-publicly traded investments.
About Next Generation Services, LLC
Founded on the philosophy that every person should have control over their retirement plans, Next Generation educates consumers and professionals about self-directed retirement plans and nontraditional investments, a strategy at one time reserved only for the very wealthy. Next Generation Services provides comprehensive account administration and transaction support, and its sister company, Next Generation Trust Company, acts as custodian for all accounts. The neutral third-party professionals at Next Generation expertly guide clients and their trusted advisors as part of their white glove, personalized service for a seamless transaction experience from start to finish. For more information, visit www.NextGenerationTrust.com or contact Next Generation at 888.857.8058 or [email protected].
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